An Edgewood realtor is facing two felony embezzlement charges centered around her business, Eden Investment Co.
A civil case with the same plaintiffs ended with a default judgment against Martha Eden for more than $3 million in October 2012; meanwhile, a criminal case with some of the same plaintiffs is set for a trial date early next year.
According to the grand jury indictment in the criminal case, Eden will face two counts of embezzlement over $20,000, and if convicted, faces up to nine years in prison and a fine of up to $10,000 per count.
Eden said in a Tuesday interview that she is innocent of the charges and that she expects to be vindicated in court. She said the number of people who had invested with her was generally “eight or less.” Asked how many clients she has now, Eden answered, “None, just me. I don’t invest for anybody else right now.”
The criminal case was filed by the District Attorney’s office about a year ago, with several witnesses deposed in recent weeks, including some from the Edgewood area.
Those witnesses include investigators from the U.S. Secret Service; alleged victims, Vincent Milavec, Harold Prezzano and Brian Hansen; a forensic analyst; Ralph and Susan Hill, of Edgewood; Kay Davis, formerly Edgewood town administrator and currently chair of the town’s planning and zoning commission; Ray Seagers, who lives with Eden and works with her at his real estate company; Dan and Lora Kniffin, who formerly worked for that real estate company and who invested money with Eden; Judith Tucker of Edgewood, another investor; and four financial institutions.
The Kniffins, who started their own real estate firm in early 2012, declined to comment for this story.
According to the grand jury indictment, Eden “did embezzle or convert” an amount over $20,000 “with fraudulent intent” from Vincent Milavec. A second felony count names Harold Prezzano as the injured party.
Prezzano and Milavec, and other parties, had sued Eden in 2011 after Eden allegedly did not return monies they had invested. “…When requests were made by the Plaintiffs to withdraw their monies or a portion thereof, [Eden] began making a series of excuses why their money was either delayed and eventually not available,” court documents say.
“After numerous attempts to withdraw funds as reflected in the statements prepared by [Eden] as representing the account balance belonging to the Plaintiffs … she represented that the monies were there; and to prove it, the provided investors a statement dated October 31, 2010, reflecting approximately $3.5 million in her account (see attached Exhibit 2).”
Plaintiffs in that case alleged that they continued to get statements from Eden Investment Co. showing account balances, but further alleged that Eden never provided the money, leading to the lawsuit. That suit ended with a default judgment against Eden for over $3 million.
“I was just still thinking if I can show people that I can recover funds over a period of time, I can get people working with me instead of against me,” Eden explained Tuesday. “That was the whole idea. That was all I ever wanted to do was make people whole. I did finally make Judy Tucker whole.”
Tucker said in a Monday interview that she had recovered the money she had invested with Eden. She also said that Eden had given her false statements. “I said how long ago were these a lie and she said back in August,” Tucker said. “That was the next April. Those statements were a lie for at least six months.”
That civil case includes a transcript of a deposition of Eden, taken by Wayne Chew, attorney for the plaintiffs in the case. In that transcript, Eden is recorded as saying that she couldn’t give the plaintiffs their money because she had “moved the trading account offshore,” adding that she “didn’t tell anybody,” including her attorney at that time.
In that deposition, Eden said she moved the funds because “I was told that I was going to be sued for several hundred thousand dollars by a group that my late husband was involved with.”
Chew asks, “Do you still have the trading account?”
“It’s offshore,” Eden replies, according to the court document.
When Chew asks for documentation of the offshore account, Eden says she has “paperwork” for it, but refuses to share it when so requested by Chew. “No. I can’t let it be made public,” Eden says, according to the court document.
Asked about that account Tuesday, Eden said she could not comment.
The deposition continues with Chew asking Eden about the statements she had provided to the plaintiffs in the case, showing that they had funds available. “Are they accurate?” Chew asks, according to the court document. “Yes,” answers Eden.
“And you prepared them based on what?” Chew asks.
“Based on what I make each month for everybody,” Eden replies, according to the transcript.
Chew asks where the money had been previously, according to the court transcript. “Where did you park your money when you didn’t have the offshore account?”
“It was in Chicago,” Eden replies.
“Chicago. Okay. How much did you leave in Chicago?” Chew asks, according to the transcript.
“None,” Eden answers. Asked why, she responds, “Because I didn’t want it subject to some kind of bankruptcy proceeding.”
“When did you file bankruptcy?” Chew asks.
“I didn’t,” Eden responded, according to the transcript.
What Eden said Tuesday was that she had an account with Peregrine Financial Group that allowed her to make trades “like a hedge fund or a mutual fund” if she had a balance of at least $250,000. She also said that Peregrine had gone bankrupt, costing her some $75,000 that she said was in that account at the time.
In another exchange, the deposition transcript says that Chew asked Eden about an account statement with “PFGBEST,” showing Eden had a balance of “about $4 million,” saying, “…I tried to get ahold of them and talk to them, and I had a subpoena out for them. They don’t have a clue about this money.”
“Um-hum,” replies Eden, according to the transcript.
“Is there a reason why?” Chew asks.
“Because by the time you did that, I was gone,” answers Eden.
Other documents in the civil case say that Eden “never made any promises or guarantees to defendants about the return on their investment and she never misrepresented anything. Moreover, Defendants are sophisticated business people with many investment options and a lot of experience, who knew the risks of investing.”
Eden repeated this Tuesday, saying that she had no contract with any of the investors, and had taken no fees. “I don’t expect to pay back $3 million,” Eden said. “The actual investment they made was like a million two, and that’s a reasonable amount. I can probably come up with that in 10 years. I didn’t take their money, I lost their money. I didn’t use it for my own purposes. I never took fees of any kind from anybody. Like I told you on the phone we had no written contracts. I was just told, ‘Do the best you can.’”
She continued, “I shouldn’t even get into this. But recovery was my only thought. Keep this account open and trade until I recover. That’s my only thought. It was a poor choice, I can agree with that. I could have said, here’s your money, what’s left, and the rest of it probably wouldn’t have happened. I wanted to make them whole, I wanted to keep going. I didn’t want to have to stop. I thought I could make it up. I really did.”
Asked what message she wanted to give to members of the community, Eden replied: “I never thought about anything but making money for people, ever. I really don’t need money myself. I have certain needs and I take care of them in a modest way, and I’m happy that way. I drive a 13-year old car with a quarter of a million miles on it. … I just wanted to make money for people and when it went bad, I panicked. I was so frightened, and I made poor choices. I could probably have made the whole thing fine if I had done it differently, but I just thought there’s only one way for me to make these people whole, and that’s to keep trading.”
Tucker had her own message for people in the community: “The only thing I would hope is that if there’s other people out there that they would come forward,” Tucker said. “I’m an intelligent person, and I really fell for it. I think people should know.”
Eden is treasurer of the Edgewood Chamber of Commerce and High Desert Riders; additionally, she has been an unpaid contributor to The Independent, which has published her writing as part of a monthly opinion feature.